Rackspace Announces Agreement to Acquire TriCore Solutions
SAN ANTONIO – May 25, 2017 - Rackspace® today announced that it signed an agreement to acquire TriCore Solutions, a leader in the management of enterprise applications, including Enterprise Resource Planning (ERP) solutions from Oracle® and SAP®. This acquisition, the largest in Rackspace history and expected to close in June, will allow the company to provide expertise and support for the mission-critical enterprise applications that companies use to manage core functions such as manufacturing, logistics, procurement, supply chain management, customer service, HR and financial operations.
Enterprise and midmarket customers have asked Rackspace to expand its offerings to include the enterprise application management capabilities that TriCore offers at scale across ERP, business intelligence and analytics, and data warehousing and integration. These applications are powerful, but also complex and expensive to run and companies are looking for help managing and optimizing these applications to deliver the most business value.
According to industry analysts, companies spend approximately $3 billion per year on ERP, business intelligence and analytics, and database managed services. The hosted segments of these markets, which is where TriCore is focused and is a market leader, are expected to grow double digits a year going forward.
“Our customers are asking us to move further ‘up the stack’ by expanding our managed application capabilities,” said Jeff Cotten, president and interim CEO of Rackspace. “TriCore's services are among the best in that space and are highly complementary to ours. They will help enable us to deliver more of the services that our existing customers need, while opening the door to new opportunities across the globe.”
The TriCore management team, led by CEO Mark Clayman, has built an exemplary organization, now 513 strong, that has delivered complex IT solutions and expertise since 1999. TriCore has cultivated a technically savvy culture of high-touch customer service much like that of Rackspace. Clayman and other key members of the TriCore management team have extensive experience in application managed services, and will join Rackspace as part of the acquisition.
“TriCore and Rackspace are a great fit in terms of our cultures and we offer complementary services,” said Clayman. "We’ve worked for 18 years to develop our delivery expertise, create value for customers, and win their trust and loyalty. We are extremely excited to join the Rackspace team and leverage its brand and industry reach to continue to expand our offerings."
About 90 percent of the TriCore workforce is focused on delivering top quality customer service. Most of its 158 U.S.-based employees work in Norwell, Mass. TriCore also has offices in Berwyn, Penn., and Milwaukee, Wisc. Another 355 employees work in Gurgaon and Hyderabad, India. TriCore employees will continue to work out of the same locations where they work today.
TriCore delivers its services on infrastructure in any location the customer chooses: the customer's data center, a TriCore data center, a colocation facility, or a data center run by a hyperscale cloud provider such as Amazon Web Services™ or Microsoft® Azure®. TriCore currently serves about 275 managed service customers across a wide range of industries, including Arby’s Restaurant Group and Kelly-Moore Paints. TriCore's revenue is growing rapidly and profitably, with strong free cash flow.
Rackspace’s adviser for this transaction is BMO Capital Markets Corp. Rackspace’s transaction to acquire TriCore is expected to close in June. Financial details will not be disclosed.
Rackspace, the #1 managed cloud company, helps businesses tap the power of cloud computing without the complexity and cost of managing it all on their own. Rackspace engineers deliver specialized expertise, easy-to-use tools, and Fanatical Support® for leading technologies including AWS, Google, Microsoft, OpenStack and VMware. The company serves customers in 150 countries, including more than half of the FORTUNE 100. Rackspace was named a leader in the 2017 Gartner Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, Worldwide and has been honored by Fortune, Forbes, and others as one of the best companies to work for. Learn more at www.rackspace.com.
About TriCore Solutions
TriCore Solutions, the application management experts, provides a full suite of scalable and reliable managed application, cloud and infrastructure hosting, and consulting services to enterprise organizations. With 18 years of experience, the company delivers its services and the TriCore Trusted Promise to more than 275 enterprise-class companies worldwide to reduce costs, raise service levels, improve customer experience, increase business agility, and accelerate innovation, unlocking the business value from their IT investments. Our partners include industry leaders such as Oracle, SAP, Microsoft, AWS, and HP. TriCore Solutions is headquartered in Norwell, MA, with offices in India and throughout North America. For more information, please visit www.tricoresolutions.com and @tricorenow on Twitter.
 Research provided by Altman Vilandrie & Co., 2017